Pub sold twice, but the new owner still owed her long service leave

What happened

In June 2006 Anna-Maree Ladyman started work as a casual kitchenhand at the Premier Hotel in Pinjarra. She also covered for the head chef and the cleaner when needed. She said she worked to a published roster, five to six days a week, and that all three owners paid her into the same bank account.

The hotel changed hands twice while she was there. The owner when she started sold it to Golden Hotels in November 2009, and Golden Hotels sold it to SAI Group of Businesses, with settlement on 28 October 2016. Before settlement SAI sent staff a letter saying their employment with Golden Hotels was ending and that, if they were offered new jobs, their past service entitlements would not be recognised. A handwritten addition to the sale contract said that "all accrued entitlements will be paid by the Seller".

Ms Ladyman kept working without a break. In November 2016 she signed a casual contract with SAI, which itself promised long service leave under the WA Act. In April 2018 a manager stopped rostering her and, she said, gave her job to someone else. She resigned in writing on 4 May 2018 and asked to be paid long service leave for her 11 years of work.

The claim

SAI did not pay. It said any entitlements were the old owner's responsibility under the sale contract. It also argued that she could not prove she had worked continuously, because she had only some of her payslips and bank statements.

Representing herself, Ms Ladyman claimed $7,823.65 under the Long Service Leave Act 1958 (WA) in the Industrial Magistrates Court. Her job was also covered by the federal Fair Work Act 2009 (Cth) and a federal hospitality award, yet her long service leave came from the WA Act.

Proving 12 years with patchy records

A worker who brings a claim has to prove it on the balance of probabilities, that is, that it is more likely than not. Ms Ladyman had incomplete payslips from 2013 to 2018 and bank statements from May 2016. She could not afford older bank statements, and some payslips were lost or never given to her.

Industrial Magistrate Scaddan found her evidence credible and reliable. Year-to-date figures helped: a payslip from May 2016 showed $37,337.09 earned that financial year, which the court said could only have come from working at the hotel since 1 July 2015. Her evidence was plain and was not really challenged; SAI simply wanted "more". Her resignation letter, written at the time, had already asked for 11 years of long service leave.

The court found she worked at the hotel from 19 June 2006 to 23 April 2018 in the same role, with breaks only for unpaid annual and sick leave.

Why: the legal test

Under s 8 of the Act (as it then stood), an employee earns 8⅔ weeks of long service leave after 10 years of continuous employment with "one and the same employer". If the job ends after seven years, other than for serious misconduct, the employee is entitled to a proportionate (pro rata) payment.

Casuals are not excluded. The Act covers any person whose usual status is that of an employee. Ms Ladyman thought casuals only became entitled after a change in the law in 2016, but the magistrate said she knew of no such change. What matters is whether the casual worked continuously for long enough.

The key question was the sale. Section 6(4) deals with the "transmission" of a business: when a business passes from one employer to another and the employee goes with it, service with the seller is treated as service with the buyer. The magistrate noted that an earlier decision, Cousens v Consolidated Ice Holdings, reached a similar conclusion: a buyer cannot cut off a worker's past service for long service leave purposes.

The sale contract did not help SAI. The court said SAI "may or may not have rights against Golden Hotels" under that contract, but that was "no answer" to the Act. Nor did the letter end her employment, because she kept doing the same job without a break. Her whole time at the hotel counted as continuous employment with one employer, SAI.

How much was awarded

Long service leave is paid at ordinary pay. For a casual whose hours vary, the Act uses the average weekly hours over the whole employment, worked out from whatever hours can be found. From her payslips the court found an average of 34.62 hours a week.

Ms Ladyman had used the higher cook's rate. The court instead blended her two roles, $23.51 an hour as a kitchenhand and $25.26 as a cook, into $24.11 an hour. It allowed 10.267 weeks of leave for her full and part service, and SAI was ordered to pay $8,569.76, more than the $7,823.65 she had claimed.

What this means for you

If you have worked regular casual shifts in WA for seven years or more, you may have a long service leave entitlement, even if your workplace has changed hands. A new owner who keeps you on generally takes on your past service, whatever the sale contract says.

If you are buying a business, check the staff's service history. A clause making the seller pay may give you a claim against the seller, but it does not stop the worker claiming against you.

Keep payslips and bank statements. If records are missing, it is worth getting advice early about what other evidence can fill the gaps.